More than 100 TOT Plc staff gathered at the True Tower building yesterday to lay a wreath in reaction to the state agency’s court defeat in their network access dispute.

Correspondingly, a public debate in Thailand over Temasek's takeover of Shin Corp is likely to intensify.

American politicians are concerned about national security. Dubai Ports' bid for London-based Peninsular and Oriental Steam Navigation Co (P&O) for $6.8 billion (Bt267 billion), has resulted in transferring the control of US ports to a United Emirates company.

Oddly, Thai politicians did not sound much alarm when a similar incident took place in September 2004. Then, the Thaksin administration awarded a lucrative 30-year concession to Li Ka-shing's Hutchison Port Holdings to run six berths at Laem Chabang deep-sea port.

Hutchison won the bid by offering a Bt1.3-billion tender, compared with Bt7 billion for Port of Dubai and Regional Container Lines.

Another consortium consisting of PSA Corporation of Singapore, Singa-Thai Co, Bangkok Success Co and Meechai Planner (Thailand) Co proposed a bid worth Bt1 billion.

On January 23, the Shinawatra and Damapong families sold off a combined 49-per-cent stake in Shin Corp to Temasek Holdings of Singapore for Bt73.3 billion.

Temasek now not only controls Thailand's largest mobile-phone business, it also owns a majority stake in the low-cost airline, AirAsia; a TV station, iTV; a satellite business, Shin Satellite; and a high-speed Internet provider CS Loxinfo.

This deal caused an uproar as it was seen as confirming the public's suspicion that the prime minister held the interests of his family above those of the country.

Overnight, Temasek, an investment arm of the Singapore government, controlled strategic businesses in Thailand.

Last year, Telenor of Norway took over United Communication Industry from the Bencharongkul family. The deal did not arouse public debate because Telenor was viewed as a private company.

Thaksin has been arguing that Temasek's domination should not be an issue as it does not own the mobile-phone, satellite or TV concessions. Temasek simply operates them, he said, while the government remains the real owner.

But with the case of Dubai Ports, it is clear the US is concerned about foreign domination of strategic businesses.

The US is also unhappy with China's attempt to buy into Unocal. Rupert Murdoch, the Australian-born media tycoon, had to change citizenship to qualify buying into a US TV network.

In a recent radio interview, Kosit Panpiemras, executive chairman of Bangkok Bank, said Thailand had always been in the middle of world's competitiveness scale. The country is being sandwiched by high-technology competitors on one side and labour-intensive competitors on the other.

He said the country should be aware of three key points as it moves to open up as there are dangers.

First, Thailand should maintain its independence in managing economic and financial policies. It is apparent that Thais do not want to repeat the period when the International Monetary Fund imposed controls over local reform plans during the 1997 financial crisis, he said.

Second, liberalisation plans should be fair. For example, Thailand may be offered zero per cent of tariff but we may face some hidden tough non-tariff conditions, he warned.

Third, Thailand should build up its "immunity" by preventing foreign investors to from controlling local business.

This could be achieved by revising certain laws.

In the US, he said, there are several laws that protect local businesses.

"We need to oversee more of our legal framework," he said.

As it is far less developed than the US, Thailand is not supposed to pursue an open economy, without any restrictions.

"There is confusion over foreign investment and foreign takeovers of Thai business. If a foreign company invests in a green-field business here, that's is welcomed. If it takes over a Thai company for market share and seeks to dominate the market, it becomes a completely different issue.

The Shin Corp deal will come into focus soon when the political crisis surrounding the Thaksin leadership unravels.

Thanong Khanthong

The Nation